This entire debate begins with the assumption that the Bush tax cuts from 2001 and 2003 led to a ballooning of the deficit problem. But as Brian Riedl at the Heritage Foundation has shown, those cuts, at every level, are responsible for only 14% of our current deficit problem, with the tax cuts at the upper margins being responsible for only 4%.
Indeed, the bulk of our deficit problem is because of "above-average spending, not below-average revenues." And there is a serious question as to whether raising rates on the wealthy raises more revenue at all based on behavior, flexibility and numbers.
Recently, The Wall Street Journal editorial page analyzed what marginal tax rates would yield at the upper brackets even if 100% of income were taxed and assets were not moved around (a mighty assumption). The answer: There simply is not enough money to be taxed among the wealthy to solve our deficit and debt problems.
Even if we were to tax 100% of the income of the top 1% in America (using 2008 statistics, the most recent year for which IRS data is available) that would yield only $938 billion in revenue, which would not even pay for a quarter of President Obama's 2012 budget. Such revenue would still leave us short over $700 billion in covering just this year's deficit.